(AP) — U.S. stocks plunged Friday, erasing the week's gains, as rising fears about fallout from Europe's debt crisis overshadowed President Barack Obama's plan to revive the U.S. job market.

The resignation of a key official from the European Central Bank was the latest sign of deepening disagreement over how to solve Europe' economic problems. And investors have to wonder whether the president's jobs plan can pass through a divided Congress.

The Dow Jones industrial average closed below 11,000. It lost 303.68 points, or 2.69%, to end at 10,992.13.

All three indexes are lower for the week. The Dow is down more than 2 percent and has fallen in five of the past six weeks, and four of the past five trading sessions.

Chicago-area blue chips also suffered: Kraft Foods Inc. slid 1.6% to end Friday at $34.51; Boeing Co. was down 1.6% to $61.79, and Caterpillar Inc. lost 3.5% to $83.96. McDonald's Corp. fell 4% to $85.02 after the fast-food chain reported a slowdown in emerging markets and missed analysts' expectations on a key revenue measure.

The Crain's Index of local stocks, compiled by Bloomberg L.P., was down 2.52% to close at 97.14 points.

Juergen Stark, the top economist at the ECB, resigned shortly after the market opened. He was an advocate for higher interest rates. Published reports said he left because he opposed the bank's extensive purchases of debt issued by heavily-indebted member nations.

Stark's resignation came as financial leaders from the world's most developed economies are meeting in France to hash out plans for reviving the struggling global economy.

On Thursday evening, President Obama unveiled a $447 billion package of tax cuts and new spending aimed at boosting hiring. He spent much of the speech challenging Congress to put aside political theatrics and pass the bill.

It's not clear whether that can happen. Republicans control the House and many of them oppose any new spending. Some reacted by calling the plan a rehash of failed strategies.

Friday's plunge continues a tough quarter for stock markets. Fears about the spreading debt crisis in Europe and the slowing global economy have encouraged traders to sell shares and make bets seen as less risky.

Analysts said shares are likely to keep falling because conditions in Europe show little sign of improving. If Europe's economy contracts, U.S. companies will likely be hurt. Half of their revenue comes from overseas, and half of that is from Europe, said Sam Stovall, chief investment strategist with Standard & Poor's in New York.

"Maybe the market has already priced in a very, very soft spot, but it has not priced in quicksand — it has not priced in a recession," he said.

Stovall said recent data make another U.S. recession appear more likely.

The government reported at 10 a.m. that sales for wholesale businesses were flat in July. It was the worst result since May.